VCT fundraising set for a strong year: the first of a number of Chelsea client discounts

9 October 2018 - VCT fundraising last year was the second highest on record and this year is set to be just as big, according to Will Fraser-Allen, deputy managing partner at Albion Capital.

“In the absence of extenuating factors, there’s no reason why VCT fundraising this year shouldn’t be substantial,” he commented recently. “The search for tax efficient alternatives to traditional pension saving are still a big driver of VCT demand, but one of the largest drivers of their success is greater awareness. VCTs have become more mainstream.”

A number of VCT offerings are indeed launching in the coming weeks. Chelsea is currently negotiating special discounts for our clients, the first of which is for Pembroke VCT:

Pembroke VCT: Chelsea client early bird discount of 1.5%

Having launched just five years ago, Pembroke VCT is one of the youngest generalist VCTs around. It has a strong emphasis on capital growth and preference for companies that are already producing profits.

It invests in unquoted companies in four main sectors: apparel and accessories, health & fitness, hospitality and media & technology and current holdings include the likes of Second Home (creative co-working and community space), burger chain Five Guys and Alexa Chung’s womenswear range.

The VCT typically invests between £250,000 and £3 million in each of its underlying businesses and is now seeking to raise £20 million, with an over allotment facility for an additional £20million. The money raised will be used to invest in both existing holdings and new opportunities.

Special early-bird Chelsea discount

There is a special early-bird discount of 1.5% in the form of extra shares on the first £10m raised or 30 November 2018 (whichever comes first) and 1% thereafter. The minimum investment is £3,000.

How to invest

Please contact Chelsea for an application form or download one from our website. To benefit from the Chelsea discount, please send all applications to our offices.

Why invest in VCTs?

VCTs can be a good way to access private companies, particularly for clients with tax bills, an appetite for taking on risk and a long-term outlook. VCTs offer 30% tax relief on amounts invested up to £200,000 per person, per tax year, for UK individual tax payers aged 18 or above. Any income or dividends that are paid from VCTs are free of income tax. In addition, any gains made within the VCT are free of capital gains tax. Please note that VCTs must be held for at least five years and that the 30% income tax relief is repayable if the shares are sold within this timeframe.

The risks

VCTs are long-term, highly illiquid investments. They usually invest in small, unquoted companies and carry a greater risk than many other forms of investment. In addition, the level of charges is often greater than unit trusts and OEICs.

For more information on VCTs please read our free guide.

To keep up to date on VCT offers, visit our webpage.

Important Notice

These details are provided for information purposes only and should not be regarded as a personal recommendation to invest: Please read the prospectuses carefully before deciding whether an investment is suitable for you. Chelsea Financial Services offers an execution-only service. If you require investment advice you should contact an expert adviser.

Past performance is not necessarily a guide to the future. The value of investments, and the income from them, can fall as well as rise and you may not get back the amount invested. Tax relief is restricted to total VCT investments for each investor up to £200,000 per tax year. Tax is subject to statutory change and the value of tax relief (if any) will depend upon individual circumstances.

Published on 09/10/2018